After hitting a record high of $950 on March 25th, Nvidia's (NVDA) stock has since declined, prompting a closer look at the company's long-term prospects. D.A. Davidson Managing Director Gil Luria joins Yahoo Finance Live to discuss why he believes that Nvidia's continued market domination is "very unlikely."
Luria says 2024 will be "a spectacular year for Nvidia." With Nvidia's top customers having openly stated plans to purchase more of the company's products, Luria says, "There's a lot of comfort in knowing that Nvidia can exceed its expectations." However, he warns that market and technology trends could threaten this momentum, suggesting that Nvidia's current dominance "won't last for very long."
Luria projects that by 2026, Nvidia could face "a normal cyclical downturn." He explains that despite the company's massive market share, its customers have even larger footprints in the landscape. If these customers continue investing in Nvidia's chips at the current pace, the companies themselves could lose market share in the long run, casting doubt on the sustainability of Nvidia's revenue margins.
While Luria believes Nvidia will continue to thrive in the short term, in the long term, he sees companies investing in their own custom-built chips to reduce costs. With the expensive price tag on Nvidia's GPU, "it's like driving to the grocery store in a gold-plated Ferrari; you don't need that," Luria says.
#stockmarket #Nvidia #youtube
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